Boeing Pension Safety - lump sum the right choice?

[Time2]

I have 10 years of service at Boeing, which will result in a pension of ~$487/month, starting early next year when I turn 65. Or I could take a lump sum of $73k.

I have not seen anyone do this quick analysis. $487 a month is $5,844 a year. While 4% of $73,000 is $2,920 a year. This is 50% reduction. Then you need to decide if the pension is good through your lifetime. You might want to think about your heirs and what the $73,000 could grow to vs the $5844 pension (minus 12% tax for my calculation, could be more) or $5,143.
So, $5,143 invested per year for 20 years at 10% is $324,000 and $73,000 invested over 20 years at 10% is $491,000.

 

[RetiredHappy]

Well, had to look... this just looking at the careers of the board...

Most are engineers and it looks like 2nd is tech people... I see only one that might be an MBA.. but should be an accountant...

I have a Computer Science and Economics degree and an MBA. We don't tell unless asked.

I bet there are more MBAs here than you realized.

 

[Texas Proud]

OK, I was using the term MBAs loosely. They are certainly not the only ones who believe that the only reason a company exists is to enrich the stockholders, to the detriment of customers and employees. I guess I need to find a better catch-all term for that mentality.

It looks to me it is the engineers that caused the problem...

It is easy to blame the MBAs and the bean counters as that sounds reasonable... but being both it just gets in my craw that it is used so much...

MBAs (if they are good) do not just look at the shareholder... they look at the value of the company.. which includes reputational value (Coke is very valuable because it is Coke)...

So, why not blame the lawyers... the engineers... the tech people... they probably had more to do with the decisions made...

 

[brett]

I blame the Board of Directors and the senior executive/leadership team.

The problem seems to be that these people were continually well rewarded for poor performance over the past 5-10 years.

If you want to understand how someone will perform, understand their compensation plan.

Boeing has had a decade or more of abysmal executive leadership. With no indication that it is about to change other than a nodding of the cap to huge financial loses this fiscal period and for the five year horizon.

Turning around Boeing will be a very different animal than turning around a GM.

 

[Gotadimple]

In reality, every board member of a major corporation has had a role as a senior executive. Most every senior executive in any major company has an advanced degree, and during their employment tenure they are expected to know how to read a financial statement, how to assess strategic intent and whether it delivers, and how to go along to get along.

 

[ziggy29]

I have a Lockheed pension coming to me eventually. I could take it now, but I plan to wait until I'm 65 in 2030 when it maxes out at $640 a month (with 100% survivor option). I've received three different lump sum buyout offers in the last 10 years or so. The most recent one was actually fairly close to being worth taking (about $72K) but still not quite there yet; the first offer in 2015 wasn't even close. Maybe the next offer will be the one I take, since the math has been better with each subsequent offer. We'll see.

 

[tryan]

My mega corp sold and the new parent offered me 77k for my $847/mo payment. An annuity calculator showed this to be a severe discount ... so I passed on it. But many I know TOOK the offer. So it was a fishing expedition for the parent company.

Your results may vary.